In late June, after implementing the CPC proposals on salary and pension, Finance Minister Arun Jaitley had announced the Lavasa panel would examine the suggestions on allowances. It had time till October to give the report but this got delayed. The decision on allowances was postponed because the CPC wanted a number of these to be abolished or subsumed. Employee unions were opposed.
Some of these allowances the CPC had suggested be done away or subsumed were an acting allowance, assisting cashier allowance, cycle allowance, condiment allowance, entertainment allowances for the cabinet secretary, flying squad allowance, haircutting allowance, rajbhasha allowance, rajdhani allowance, robe allowance, secret allowance, shoe allowance, shorthand allowance, soap toilet allowance, spectacle allowance, Sunderban allowance, uniform allowance, vigilance allowance and washing allowance.
Of 196 allowances, the CPC report had recommended abolition of 52 and subsuming of another 36 into larger existing ones. A deferment on revising of allowances meant that as opposed to a burden of Rs 1.02 lakh crore as envisaged by the CPC, the government had provisioned for Rs 84,933 crore in 2016-17 for pay and pension, including Rs 12,000 crore in arrears.
There are other recommendations on allowancse which the panel led by Lavasa has been tasked with examining. These include a change in the present system of accounting, wherein pay and allowances are clubbed and it is difficult to bifurcate these. The CPC recommended a separate object head for budgeting and accounting be used to record the expenditure.